Fintechs capture 57% share of small personal loans as stress mounts: RBI report

Fintech lenders continued to tighten their grip on India's small-ticket personal loan market, accounting for more than half of all loans below Rs 50,000 by March 2026, even as rising delinquencies signalled growing stress in the segment.

According to the Reserve Bank of India's latest data from the Financial Stability Report, fintech firms held a 56.8% market share in personal loans below Rs 50,000 as of March 2026, up on the back of a 41.6% year-on-year expansion in credit—more than double the overall segment growth of 20.1%.

In comparison, non-bank finance companies, including housing finance companies, accounted for a 30.7% market share, while banks' share declined to just 10.1%. The remaining 2.3% was held by other lenders.


The rapid growth, however, has been accompanied by rising asset quality concerns. Delinquencies in small-ticket personal loans originated by fintech lenders stood at 6.4% in March 2026, higher than 5.7% for NBFCs and 4.1% for banks, indicating that the fastest-growing lenders are also witnessing the highest levels of stress.

The RBI data also showed that unsecured loans constituted 70.5% of fintech lenders' overall loan book, with nearly half of these loans extended to borrowers below the age of 35, highlighting the sector's increasing exposure to younger and relatively riskier customer segments.

Across the broader consumer lending market, however, asset quality continued to improve. Delinquency rates in business loans fell to 1.8%, while credit card delinquencies declined to 1.4% and personal loan delinquencies eased to 0.9%.

The microfinance sector also showed early signs of stabilisation. Credit to the sector expanded for the first time after seven consecutive quarters of decline, although the borrower base continued to contract, shrinking by 22.7 lakh during the latest quarter.

Asset quality improved for the fifth consecutive quarter, with the share of loans overdue by 31-180 days declining further. The proportion of borrowers with loans from three or more lenders also fell to 9.7% in March 2026, reflecting lower levels of multiple borrowing.